Top Chinese Economist Suggests Seizing TSMC, Top Apple Chip Supplier

TSMC Apple Chip Supplier

Tensions between the U.S. and China have been escalating since Russia began its invasion of Ukraine. As western countries mull the possibility of imposing economic sanctions on China, one of Beijing’s top economists suggests the country strike back by “reclaiming” Taiwan. This would result in China taking over control of Apple’s top chip supplier, TSMC.

Asian Governments More Sensitive to Potential Conflicts

Chen Wenling, chief economist for the China Center for International Economic Exchanges (CCIEE) made the suggestion during a recent online forum. The conversation, on May 30, concerned worsening relations between the U.S. and China. The CCIEE is run by the Chinese government.

Chen didn’t offer any reason she believes the U.S., or any other country, would improve sanctions on China. The reference to Russia’s invasion of Ukraine, though, makes it clear the Chinese government is more sensitive to potential conflicts in the region in light of the ongoing war.

Should the US and the West impose devastating sanctions on China just like how they did to Russia, we must reclaim Taiwan.

It’s also worth noting that President Biden has suggested the U.S. will respond with military action, should China invade Taiwan.

For a very long time, China has viewed Taiwan as part of its territory. For its part, Taiwan remains self-governing and consistently rejects China’s claims. The Taiwanese government maintains it is an independent nation, no matter what Beijing says.

The Ongoing Importance of Taiwan and TSMC As a Top Apple Chip Supplier

Apple sources all of the chips for its iPhones from TSMC, headquartered in Taiwan. The manufacturer also produces the Apple Silicon chips found in newer Macs and iPads. While the company is working to transfer its operations to the U.S., the six planned factories for that transition are nowhere near ready to begin production.

Now, it appears the Chinese government wants to stop that transfer altogether. “TSMC is speeding up its transfer to the U.S. with six factories planned in America,” Chen said. “We must not allow it to achieve its aim.”

Especially when we’re talking about production and supply chains, we must seize corporations that rightfully belong to China, such as TSMC.

From Apple alone, TSMC expects to make $17 billion in revenue (via MacRumors). China would love to cash in on that revenue, if it could, and sounds willing to take dramatic steps to push that agenda forward.

In the past, rumors have suggested Apple might open its own chip manufacturing plant, independent of TSMC. That’s never come to fruition, though. Nor does it appear to be anywhere near on the horizon. If anything, we can see Apple tightening its ties to the Taiwanese chipmaker.

TSMC is responsible now for production of the new M2 SoC. Furthermore, reports surfaced recently of Apple gearing up for the next member of the M2 family, the M2 Pro. That SoC, the reports suggested, will make use of TSMC’s latest 3-nanometer production technology.

We can only hope relations between the U.S. and China improve, rather than deteriorating further. Until TSMC can get its U.S. factories operational, Apple and much of the rest of the tech industry will be as reliant on Taiwan as it is on mainland China.

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Lee Dronick

I have long been saying that a smart business would find a way of getting their manufacturing out of China, to not be locked in there.